Telecom equipment maker Avaya Holdings Corp. on Thursday filed the necessary papers with the Securities & Exchange Commission for an initial public offering (IPO) worth $1 billion.

Avaya, which had been taken private by venture capitalist firms Silver Lake and TPG Capital for $8.3 billion in 2007, said that it would use the proceeds from the IPO to pay back long-term debt and redeem stock.

The filing with the SEC states that Silver Lake and TPG Capital owns 72.3 per cent of the Avaya’s shares.

According to analysts’ estimates, the IPO would be about 20 per cent of Avaya’s worth, putting the overall value of company at around $5 billion.

Avaya claims that the total value of the markets it operates in will worth around $77 billion in 2011.

Avaya claims to have more than 400,000 customers, including more than 85 per cent of the Fortune 500 companies. But, rising cost and cut-throat competition in the market hit its prospects. Avaya’s net loss soared from $417 million to $612 million during the six months ended March.

Morgan Stanley & Co., Goldman, Sachs & Co., J. P. Morgan Securities, along with others will handle the public offering.